Rent Sharing in the Multi-fibre Arrangement: Theory and Evidence from U.S. Apparel Imports from Hong Kong

Kala Krishna (), Refik Erzan () and Ling Hui Tan

Review of International Economics, 1994, vol. 2, issue 1, 62-73

Abstract: Available estimates of tariff equivalents and welfare costs of MFA quotas are based on the premise of perfect competition in both product and license markets, and the assumption that exporting countries receive all the scarcity rent. We test if U.S. apparel imports from Hong-Kong conform with this competitive model by looking at whether the license-price-inclusive Hong Kong price, adjusted for tariffs and transport costs, is equal to the U.S. price. We deal with the homogeneous product case and correct for both aggregation and quality differences. We find that U.S. importers seem to retain a substantial portion of the quota rents. Copyright 1994 by Blackwell Publishing Ltd.

Date: 1994
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Related works:
Working Paper: RENT SHARING IN THE MULTI-FIBRE ARRANGEMENT: THEORY AND EVIDENCE FROM US APPAREL IMPORTS FROM HONG KONG (1991)
Working Paper: Rent Sharing in the Multi-Fibre Arrangement: Theory and Evidence from US Apparel Imports from Hong Kong (1991)
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